There is a common mis-conception that Defined Benefit transfers are the scourge of society, an inherent evil that must be stamped out. This is far from true.

In Financial Planning Today magazine our popular Planner Casebook feature, written by some of the most distinguished Financial Planners in the UK, often involves one or more DB transfers.

Clients with complex financial arrangements and a desire to simplify and organise their retirement planning often find that a transfer is a sound part of a robust Financial Plan devised by a planner after many weeks of fact finding, research and client meetings. The best planners know this, perhaps the public do not.

To be fair the public collective consciousness has been fuelled by endless headlines of pension rip-offs, the British Steel Pension mess and stories about advisers collecting fat fees by using contingent charging.

With this in mind it was interesting to see the results this week of a Freedom of Information request from AJ Bell to the government on the transfer surge post the 2015 Pension Freedoms revolution.

In brief, this found that one of the main spurs to pension transfers was soaring transfer values rather than contingent fees. In other words, pension savers were attracted to the idea of getting a good deal by transferring their pension rather than being pushed into an unsuitable transfer. Based on this, AJ Bell’s view is that a proposed FCA ban on contingent charging may be misplaced and contrary to the consumer interest.

I am no big fan of contingent fees - they seem to go agains the grain of professional Financial Planning advice - but if they help consumers get at least some advice on pensions, rather than none, as long as they are properly regulated they could be beneficial to many. We have to accept that the vast majority of consumers will struggle to ever afford Financial Planners’ fees.

It is clear, if AJ Bell is right, that consumers are being tempted to transfer by soaring transfer values. Transfer values reached a all-time record in August, according to XPS, so the tempation may be there for some time and in some cases transferring will be the right thing to do.

AJ Bell also suggests the data implies that many unsuitable transfer cases are ‘triaged’ out in the early stages of advice so the figures are skewed by this. The problem may be smaller than at first thought. AJ Bell also suggest that when transfer values fall the number of transfer appears to decline implying market forces are at play as they are in house prices.

It is likely that with the bad publicity, rising PI costs for advisers and more scrutiny of pension transfers the numbers of transfers will fall but there appears no need to ban or bring a complete halt to transfers. The facts do not support that strategy, AJ Bell believes and I have sympathy with that view.

What is actually far more important is not whether transfers are a good or bad thing but whether and how people can source good, long term retirement planning advice to help with their overall pension planning and in that regard, as a country, we’ve failed so far. The pension transfer mess is just a symptom of that failure.

Kevin O’Donnell is editor of Financial Planning Today and a financial journalist with 30 years experience.  This topical comment on the Financial Planning news appears most weeks.

Follow @FPT_Kevin